By Jennifer Gomez, Esq.
I’m an estate planning attorney and I often say that means two things: I have my dream job, and I help people be really good at protecting the things they care about most. Estate planning doesn’t just refer to planning for wealthy people. It encompasses all of the tools to protect you, your assets, and your loved ones during your incapacity or at death. As someone who has always lived with mild anxiety, I’m better able than most to spot the “what ifs” in a person’s life and help proactively avoid the negative things that may occur.
The best tool in the world of estate planning is the trust. A trust is a legal document that lets you separate ownership into its two basic parts: control and benefit. Most people own things in a way where they are so intertwined they don’t even think of those two parts separately. With a trust I can have both control and benefit while I am alive and well. After my death however, I may want to leave one person in control of money and other assets for the benefit of a different person. You see this used often when the person to be benefitted, known as the beneficiary, has special needs, is a child, or is financially irresponsible.
A specific subset of these trusts is a Special Needs Trust. A Special Needs Trust lets you choose someone to manage money and other assets that you would like to leave to your child or other beneficiary with special needs. A Special Needs Trust has another HUGE benefit. Money held in a special needs trust DOES NOT disqualify the beneficiary from receiving government benefits like SSI (Supplemental Security Income) or Medicaid. This can be a great way to take care of someone who has a traumatic brain injury, autism, down syndrome, PTSD, or clinical depression.
Let’s use a fictional example, with Joan and her daughters Beth and Susan. Historically, if Joan wanted to leave money to her daughter, Beth, who is severely autistic, unable to manage her own banking, and receiving SSI and Medicaid, Joan had two terrible options. Joan could leave the money in a will directly to Beth, but Beth would be disqualified from Medicaid and SSI until the money ran out. This money would also be subject to an expensive court supervised guardianship, where the court oversees how the money is spent. The other old option would be for Joan to leave Beth’s money to her other daughter Susan and hope Susan does right by Beth. Unfortunately, many times the person who received the money did not do right by the beneficiary with special needs. Thankfully, today we have Special Needs Trusts so that the beneficiary is protected and can use the money to supplement what government benefits cover. That is why you sometimes hear Special Needs Trusts called supplemental needs trusts.
Special Needs Trusts are so important that I include contingent Special Needs Trusts in estate plans for almost all of my clients even if none of their beneficiaries currently have special needs. This allows a Special Needs Trust to be created if a beneficiary needs one at the time of my client’s death.
Another thing that can be addressed in an estate plan is guardians for minor children. A guardian is the person who would take care of your child on a daily basis. This is different than the Trustee, the person who manages the assets of a trust. In both cases, I believe the child’s parent is the best person to decide who these very important people should be, instead of judges and lawyers deciding for the family.
One of the greatest things I get to do is give people peace of mind. There is no better feeling to me than wrapping up with a family and seeing how relieved they are to know that their legal and financial affairs will be taken care of in an organized and efficient way. This takes away a lot of stress from a very stressful time. The most important goal for a lot of my clients is to make sure their kids are comfortable and safe. The Special Needs Trust is such a valuable tool to achieve this goal that all parents should consider it.